Scenario: negotiating an MSA from should-cost
Where you concede, where you hold, and the total value captured when you negotiate from evidence.
Negotiate an MSA from a should-cost base: concede what's cheap to you, hold what isn't, and count the value captured.
You're negotiating a two-year master service agreement with a strategic supplier. You walk in with a should-cost model, not a target plucked from last year's price — so you know which asks are real and which are opening theatre.
The opening positions
TermTheir openYour target
Unit price€6.40€5.90
Payment termsNet 30Net 60
Annual rebate0%3% over €1M
Price lock6 months24 months
Where you concede, where you hold
- Concede what's cheap to you. You give on a modest volume commitment — it costs you little and unlocks their price move.
- Hold on the price lock. A 24-month lock caps your risk; the should-cost model shows their inputs won't move enough to justify a shorter one.
- Trade terms for terms. You accept Net 45 instead of Net 60 in exchange for the rebate — cash-flow value for margin value.
The settlement
TermAgreedValue / yr
Unit price€6.00€52,000
Payment termsNet 45€9,000
Rebate3% over €1M€21,000
Price lock24 monthsRisk capped
Total annual value captured: €82,000 — and every concession was traded, not given, because the should-cost model told you what each one was actually worth.
Negotiating from evidence instead of instinct is what SourceWright equips you to do.
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